Social Security – The Saturday Evening Posthttp://www.saturdayeveningpost.com
Home of The Saturday Evening PostFri, 09 Dec 2016 16:25:04 +0000en-UShourly1https://wordpress.org/?v=4.6.1Fallinghttp://www.saturdayeveningpost.com/2015/09/14/in-the-magazine/trends-and-opinions/falling.html
http://www.saturdayeveningpost.com/2015/09/14/in-the-magazine/trends-and-opinions/falling.html#commentsWed, 30 Nov -0001 00:00:00 +0000http://www.saturdayeveningpost.com/?p=110539This Pulitzer Prize-winning author started life comfortably middle class. But now, like a lot of other people walking the streets of America today, he is poor. Here's how it happened.

]]>The rich are all alike, to revise Tolstoy’s famous words, but the poor are poor in their own particular ways.

Any reasonably intelligent reader could blow that generalization apart in the time it takes to write it. But as with most generalizations, a truth lies behind it. Ultimately, what binds the rich together is that they have more money, lots more. For one reason or another, the poor don’t have enough of it. But poverty doesn’t bind the poor together as much as wealth and the need to protect it bind the rich. If it did, we would hear the rattle of tumbrels in the streets. One hears mutterings, but the chains have not yet been shed.

I have some personal experience here. Like a lot of other people, I started life comfortably middle-class, maybe upper-middle class; now, like a lot of other people walking the streets of America today, I am poor. To put it directly, I have no money. Does this embarrass me? Of course, it embarrasses me — and a lot of other things as well. It’s humiliating to be poor, to be dependent on the kindness of family and friends and government subsidies. But it sure is an education.

Social classes are relative and definitions vary, but if money defines class, the sociologists would say I was not among the wretched of the earth but probably at the higher end of the lower classes. I’m not working class because I don’t have what most people consider a job. I’m a writer, although I don’t grind out the words the way I once did. Which is one reason I’m poor.

My income consists of a Social Security check and a miserable pension from the Washington Post, where I worked intermittently for a total of about 25 years, interrupted by a stint at a publishing house in New York just before my profit-sharing would have taken effect. I returned to the Post, won a Pulitzer Prize, continued working for another eight years, with a leave of absence now and then. As the last leave rolled on, the Post suggested I come back to work or, alternatively, the company would allow me to take an early retirement. I was 53 at the time. I chose retirement because I was under the illusion — perhaps delusion is the more accurate word — that I could make a living as a writer, and the Post offered to keep me on their medical insurance program, which at the time was very good and very cheap.

The pension would start 12 years later when I was 65. What cost a dollar at the time I accepted the offer, would cost $1.44 when the checks began. Today, what cost a dollar in 1986 costs $2.10. The cumulative rate of inflation is 109.7 percent. The pension remains the same. It is not adjusted for inflation. In the meantime, medical insurance costs have soared. Today, I pay more than twice as much for a month of medical insurance as I paid in 1987 for a year of better coverage. My pension is worth half what it was. And I’m one of the lucky ones.
I was never remotely rich by what counts for rich today. (That requires a lot of zeroes after the first two or three digits.) But I look through my checkbooks from 25 and 30 years ago and I think, Wow! What happened? It was a long, slowly accelerating slide but the answer is simple. I was foolish, careless, and sometimes stupid. As my older brother, who to keep me off the streets invited me to live with him after his wife died, said, shaking his head in warning, “Don’t spend your capital.” His advice was right, but his timing was wrong. I’d already spent it. He sounded like the ghost of my father. Capital produces income. If you want to have an income, don’t dip into your capital. I’d always been a bit of a contrarian, even as a child.

My money wasn’t working hard enough to finance my adventures, which did, after all, come with a price. I wanted to explore and write about eastern Europe after the fall of the Wall, which I did for several years. It was truly a great adventure, it changed my life, and it was a lot more interesting than thinking about what it cost, which was a lot. There’d always been enough money. I assumed there always would be. (I think this is called denial.) So another dip into the well. In my checkbook, I listed these deposits as draws. That sounded very businesslike, almost as if I knew what I was doing. Sometimes I did. (It’s hard to resist a little self-justification.)

Against the advice of people who thought they knew better, I bought shares in AOL before it really took off and in Apple when it was near its bottom. I figured Apple’s real estate must be worth more than the value the market gave the company. I was right. Shares in both companies soared. If I’d shut up and stayed home … but I didn’t. On the advice of these same people who advised me against AOL and Apple, I turned my brokerage account into a margin account for someone else to handle, and I left the country again. A few more dips into the well, a few turns in the market, a few margin calls, and when I went back for another dip, the well was empty. The old proverb drifts back to me on a wisp of memory. A fool and his money are soon parted. My adventures were over.

The story is, of course, more complicated than that — whose story isn’t? — but these are the essentials. It’s unlikely, and it’s not intended, to evoke sympathy. I’d acted like one of those people who win the lottery and squander it on houses, cars, family, and Caribbean cruises. But I hadn’t won the lottery; I’d fallen under the spell of magical thinking. In my opinion, I didn’t squander the money, either; I just spent it a little too enthusiastically — not on Caribbean cruises but on exploring the aftermath of the fall of Communism in eastern Europe. I don’t regret it. When my writing was bringing in a little money I had a Keogh plan, and when I was at the Post a 401(k) account. I’d made a little money in real estate and received a couple of modest but nice inheritances, which together, and with Social Security and the pension, would have given me enough income to live on, had I not felt I’d lost the ability to continue writing and had I forgone, or at least spent more modestly on, my work in Europe and related activities, avoided the margin account, and so on. The “so on,” I should add, included a major heart attack that led to congestive heart failure, a condition that greatly reduced my physical resilience and taxed my already-limited income.

There are a lot of people like me, exiles from the middle class who suddenly find themselves on Grub Street. Unless something truly awful has happened, they are not standing at the corner with a cup like my friend Kenny, whom I pass every Wednesday afternoon when I’m entering the farmers’ market at Foggy Bottom in downtown Washington, D.C. We chat. He’s bent over a cane but always clean and nicely dressed. He tells me not to stay long, that it’s too hot. Kenny is a genuinely compassionate man. I tell him I am writing an article on poverty, my own poverty, but I’d like to know about how he got where he is. Would he talk to me? Yes, he would, but our conversation hasn’t happened yet. I feel guilty that I am shopping at this upscale market when I am wondering which medical bill I can postpone this month and, which, if any, I can pay. Meanwhile, Kenny stands at the corner with his cup. On my way out, I bring him a gelato. It’s too hot to stand and talk.

Kenny looks poor. He looks weary. After it had been pointed out to me by a friend who has a brain in his head but once had no money in his pocket, I noticed that the truly poor often look weary. Dealing with the system — “the Man” — is frustrating, exhausting, and takes many hours of waiting for bus and subway, of shuffling back and forth from one office to the next, one building to the next, one bureau to the next, filling out forms and generating a growing stream of paper along the way. Fortunately, I haven’t had to deal with government agencies very often, but once I took an addict, who was in dire straits, to an agency that might give him a referral for psychiatric treatment at a much reduced rate or even to a well-regarded clinic in another part of the city for free.

He’d need Medicaid, of course. It took the entire day, from eight in the morning to five at night. The waiting room was jammed. There must have been 75 people there, and for most of them it was not their first visit. When my friend was called to see a member of the staff who could pass him to another, and so on, I was the only white person in the room. But I was not the only poor person in the room. The only people who weren’t were the two women behind the desk, probably hanging on by their teeth to the lowest rung on the middle-class ladder. Nice women, actually, patient and polite.

Poverty is a great leveler. There was camaraderie among those men and women in the waiting room. My awkwardness soon slipped away and I, too, became part of the group. I heard stories; I laughed; and we talked. It was interesting, an experience, as they say, like working on a freighter, which I did for a time. Only my experience as an able-bodied seaman in my youth was one of my attempts to try on a new identity and escape the world around me. This waiting room in a part of the District of Columbia’s government most middle-class people never see was not an escape from the “real world”; it was the real world. All of us there had two things in common: None of us had any money, and all of us had time. That was good because, as I said, I was there all day.

Poverty, my mother used to say, is a state of mind. She never stood in line to apply for welfare, or Medicaid, or food stamps. Then she would have learned, as I did, that it may be a state of mind — and to some degree I believe it is — but it is also a harsh daily reality for millions of her fellow citizens of this country and on this planet. And now for her son.

I am not trying to exaggerate my own particular plight. I’ve never had to apply for welfare, or Medicaid, or food stamps. I have asked the Department of Housing and Urban Development (HUD) to subsidize my rent and a District office to subsidize my medical insurance payments. That involved a lot of paperwork but not a lot of lines, and I am very glad to live in subsidized housing with a number of people who really run the gamut. One of them is the great-grandson of Leo Tolstoy. Another fled Bulgaria as the Communists were taking over, eventually came to the United States, speaks several languages, and worked for the Library of Congress. There are refugees from one regime or another, from all parts of the world. They come in all colors. Some were trained as lawyers, some have doctoral degrees, some were teachers. There are journalists and writers. What we have in common is we are all older, we are all poor, and each of us has, to a greater or lesser degree, the ailments that come with age. As everybody knows, if you don’t have good insurance, medical bills can be catastrophic and have been for some of us here. But I think all of us would agree that living here beats living in a homeless shelter.

Compared with most poor people, I am fortunate. If you’ve got to be poor, finding yourself at the upper edge of poverty with a roof over your head and a wardrobe that doesn’t look as if it came from the Salvation Army is as good as it gets. It also helps to be white.

An African-American trainer at a gym I used to go to before the well went dry had a lot of clients and must have made decent money, enough to support himself and his son, anyway. He was walking down Connecticut Avenue one day when he saw one of his female clients approaching.

“I don’t have any,” she exclaimed and turned abruptly away as he was opening his mouth to greet her. “I don’t have any money!”

She didn’t see my friend Jeff; she saw a black man in trainers about to ask her for a handout on one of the busier avenues in the city. Jeff doesn’t look like a hustler. He doesn’t look poor. I don’t look poor, either, but I am white. So I never suffered that kind of demeaning slight.

By federal government standards, I’m not poor, but by any rational standard, I am. My income is above $11,670 annually, which, in 2014, puts me above the poverty line for a single person. My Social Security comes to more than that. The federal minimum wage in 2014 is $7.25 an hour, or $15,080 annually. When FICA taxes of 7.65 percent for Social Security and Medicare are deducted, that brings the income of a full-time minimum-wage worker to $13,949. For a family of three, the poverty line is $19,790. This is not a joke. It doesn’t leave much extra for an ice cream cone.

I have a roof over my head, thanks to the aforementioned HUD subsidy, which required hours of paperwork, signed affidavits from doctors, many duplicate copies, and a lot of running around. (The Paperwork Reduction Act was passed in 1980. How many trees, I wonder, has it saved?) The management of the building where I live used to deal directly with HUD. Now a company based in Alabama has been hired as a distant intermediary of sorts between the very capable management and HUD. I don’t believe this was done in an attempt to reduce paperwork.

If you’re poor, what might have been a minor annoyance, or even a major inconvenience, becomes something of a disaster. Your hard drive crashes? Who’s going to pay for the recovery of its data, not to mention the new computer? I’m not playing solitaire on this machine; the hard drive holds my work, virtually my life. It is not a luxury for me but a necessity. I need dental work. Anybody got $10,000? Dentists are not a luxury. Dental disease can make you seriously ill. Lose your cell phone? What may be a luxury to some is a necessity to me. Without that telephone and that computer, my life as I have known it would cease to exist. Not long after, so would I. I am not eager for that to happen. Need to go to a funeral hundreds of miles away? Who pays for the plane ticket? In the case of the funeral, my nephew paid for the plane ticket. My daughter and son-in-law paid for the dental work. Sometimes, I find it deeply humiliating that I am dependent on such kindnesses when I would prefer that the kindnesses flow the other way. Most of the time, though, I am just extremely grateful for the help of family and friends. It’s not so much humiliating as it is humbling, which is a good thing.

I am ashamed to have gotten myself into this situation. Unlike many who are born, live, and die in poverty, I got where I am today through my own efforts. I can’t blame anyone else. Perhaps, it should be humiliating to reveal myself like this to the eyes of any passing stranger or friend; more humiliating to friends, actually, some of whom knew me in another life. Most of my friends probably don’t realize or would rather not realize just how parlous my situation is. Just as well. We’d both be embarrassed.

Although I am embarrassed by my condition, and ashamed of myself for putting myself there, I feel grateful to have had some of these experiences and even more grateful to have survived them.
I am glad that none of my friends has ever found himself sitting on a bench in a park with a quarter in his pocket, as I once did, and nothing in the bank; in fact, no bank account. It’s a very lonely feeling. It gives new meaning to the sense of loneliness and despair.

I wallowed in that slough for a bit. It was not, after all, a happy situation, and I am not a dimwitted optimist. But I had two choices, die in the slough or move on. I thought of the last two lines of Milton’s Lycidas,

At last he rose, and twitch’d his mantle blue:
To-morrow to fresh woods, and pastures new.

So I got up, forever grateful to Mr. Barrows, my college English instructor, for teaching me to study Lycidas seriously and realize what a great poem it is and why that matters.

]]>http://www.saturdayeveningpost.com/2015/09/14/in-the-magazine/trends-and-opinions/falling.html/feed5Get the Best of Social Securityhttp://www.saturdayeveningpost.com/2015/02/23/in-the-magazine/finance/get-best-social-security.html
http://www.saturdayeveningpost.com/2015/02/23/in-the-magazine/finance/get-best-social-security.html#commentsMon, 23 Feb 2015 13:00:17 +0000http://www.saturdayeveningpost.com/?p=105098Wait for it! A simple plan to keep you safe and comfortable in your oldest years.

]]>In an age of medical advances and increasing life spans, good financial planning emphasizes minimizing the danger of running out of money before the end of life. What everyone needs is some sort of longevity insurance. Many such financial products are available for purchase, but they tend to be expensive and overly complex. The ideal would be an annuity for life, adjusted to keep up with inflation, guaranteed by a super-safe issuer, simple to understand, and without any additional costs.

The good news is that we all have such an annuity — our Social Security benefit. Indeed, this is the biggest financial asset many American families own. It is very easy to underestimate its worth; a recent study estimated the value for higher earners as being $390,000 for a single person and $710,000 for a married couple. Careful planning with this precious resource can make a tremendous difference in the quality of your later life.

The secret? Wait as long as you can; ideally until the benefit is maximized. Those who begin taking Social Security at age 62 will receive a smaller check for the rest of their lives. Even those who wait until the official full retirement age (formerly 65 and now slightly higher) are missing out on a deal that is too good to pass up; the future benefit is increased by approximately 8 percent each year that you wait until age 70.

Some people are worried, though, that they will “lose out” if they delay collecting and die early, because they will have received less money. Basic game theory (a study for which my old professor Thomas Schelling won the Nobel Prize) can guide us in better understanding the choice.

Consider the two fundamental claiming options (claim early/claim late) along with the two possibilities for your longevity (die early/die late). To analyze this effectively, make a chart like the one below. Start with your options and possibilities, then fill in each row with the words win or lose to indicate whether you would do well or poorly if that scenario occurred. Here’s what your result should look like:

Claim Early

Claim Late

Die Early

Win

Lose

Die Late

Lose

Win

At first glance, it appears that either claiming strategy offers an equal chance to win or lose. It all depends on when you die — something nobody knows in advance. Upon further reflection, though, the better answer becomes very obvious.

If you claim your benefit early and die young, your pleasure in “winning” will be limited. After all, you will be gone. Similarly, you will not suffer too much by making the “losing” bet of claiming late and dying early. Again, you won’t be around.

It quickly becomes clear that the “die early” option should not be given the same weight as the “die late” option. In fact, to make the whole thing remarkably simple, cross out the “die early” column. Claim early and you lose; claim later and you win. Simple.

The decision to maximize your benefits by waiting is in perfect accord with what I call the “highest and best use” of Social Security in financial planning. Use it as a superb longevity insurance policy. Be sure to build the monthly benefit to the highest amount the government will allow. It will be worth a small sacrifice in your 60s to be safer and more comfortable in your oldest years.

]]>In the spring of 1935, at the depths of the Great Depression, Congress voted by a landslide to create Social Security—372 to 33 in the House and 77 to six in the Senate. Almost nobody was against it. In the years since, it has grown to be the biggest government program in history, anywhere ever, and arguably one of the most successful. It has lifted tens of millions of Americans out of poverty. Today it provides 56 million people a guaranteed paycheck, and nearly two-thirds of retirees count on it for more than half of their income. Yet many now see it as a huge failure. Among the 2012 presidential candidates, Rick Perry has called it a “Ponzi scheme” and a “monstrous lie,” and Mitt Romney has written that “to put it in a nutshell, the American people have been defrauded.” We are told it is going bankrupt. What happened? Where did Social Security come from? And is it really in such grave danger?

The story begins more than a century ago in Imperial Germany. In 1889 Chancellor Otto von Bismarck got a law passed setting up an old-age insurance program that required German workers to contribute a portion of their wages to a fund that would pay them in their retirement. Why? In a time of frightening worker unrest and socialist ferment, Bismarck bluntly admitted that he wanted “to bribe the working classes … to regard the State as a social institution … interested in their welfare.” In other words, he feared he had to start doing more for the workers or they might rise up against him.

Before long other European nations followed. The U.S., with its powerful spirit of self-reliance and independence, did not. Yet old age was getting harder for Americans. By the end of the 19th century the nation had gone from mainly agricultural to industrial, from rural to urban, and from extended families in which generations stayed together to what we now call the nuclear family, of parents and children alone. Americans who worked in factories or offices could easily find themselves out of a job in economic hard times, and when they retired they couldn’t fall back on their families as their parents had. Also, people were living longer. That all added up to more and more people facing long old ages without any resources.

A timeline of Social Security

Click on the arrows or dates to scroll through key moments in this interactive timeline.

European inspiration

German Chancellor Otto von Bismarck passes an old-age insurance program that becomes a model for Britain and other European nations.

An early American plan

Retired doctor Francis E. Townsend devises a program—funded by a two percent national sales tax—that would pay every American over 60 a pension of $200 a month that had to be spent within 30 days.

Protection for all

Louisiana Governor Huey P. Long launches the Share Our Wealth Society, which calls on the government to guarantee every family an annual income of at least $2,000.

Talks grow serious

Secretary of Labor Frances Perkins heads a committee that recommends a federal social insurance plan, which includes unemployment insurance and “old-age” security.

The beginning

Franklin D. Roosevelt signs the Social Security Act on August 14. Payroll taxes are first collected in 1937.

MONTHLY PAYMENTS start

On January 31, Ida May Fuller becomes the first to receive a monthly check. The amount is $22.54.

The guarantee

President Roosevelt is quoted as saying: “We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions. With those taxes in there, no damn politician can ever scrap my Social Security program.”

The program grows

Mary Thompson, a widow, is the one millionth Social Security recipient.

Inflation, duly noted

Social Security adds a cost of living adjustment.

Help for the disabled

Social Security is amended to provide monthly benefits to disabled workers ages 50 to 64 and for disabled adult children.

An early retirement option

President Kennedy signs an amendment permitting men to retire at 62 with a reduced benefit. (Women had been given this right in 1956.)

A better inflation plan

President Nixon signs an amendment to make cost of living adjustments automatic.

First fears of insolvency

Legislation is enacted to raise taxes and scale back benefits.

Money worries continue

President Reagan signs a law taxing benefits. The retirement age is raised from 65 to 67, but not until 2000.

Still more concerns

The taxable portion of benefits is raised from 50 percent to 85 percent.

Staying on the job

President Clinton signs a bill eliminating the Retirement Earnings Test (RET), allowing seniors who continue working to receive full benefits.

The privatization effort

After winning re-election, President Bush uses political capital to push for partial privatization—a program in which individuals would manage their own accounts. In the face of resistance from seniors and their advocacy groups, the plan slowly dies.

Generation Shift

Kathleen Casey-Kirschling, generally recognized as the first-born member of the baby boom generation, receives her first Social Security check.

A new insolvency threat

The U.S. Deficit Commission, set up by President Obama, recommends raising the retirement age to 68 and reducing the annual cost of living increases. The plan is not adopted.

The Challenge

“There are one of two ways you can make Social Security work forever. One is to raise the retirement age by a year or two. The other is having slower growth in inflating the benefits of higher-income of Social Security recipients.” —Mitt Romney

An outright attack

Drawing a line in the sand

“We should … strengthen Social Security for future generations. And we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market.” —President Obama, State of the Union

Click Arrow For Previous Event

Click Arrow For Next Event

There were modest pensions for veterans and a few company pension plans, especially among railroads. After the Stock Market Crash of 1929 a few states tried to set up old-age pension systems, but didn’t have the power to effectively implement them. Most older Americans had nothing to fall back on. By 1934, it is estimated, more than half of the elderly in the U.S. were unable to support themselves.

Popular movements arose to challenge this dire situation and agitate for impossible solutions. Huey P. Long, then governor of Louisiana, started the Share Our Wealth Society, which called on the government to guarantee every family in the nation an income of at least $2,000 a year (about $33,000 today), plus a pension for everyone over 60 and confiscation of every personal fortune above $8 million. By 1935 Share Our Wealth had 7.7 million members. Francis E. Townsend, a broke 66-year-old retired doctor, launched a proposal in 1933 to pay every American over 60 $200 a month ($2,400 today) on the condition they spend the money within a month. The payments would be funded by a two percent national sales tax. He soon had millions of followers who organized Townsend Clubs across the country to promote his plan.

President Franklin D. Roosevelt said at one point, “The Congress can’t stand the pressure of the Townsend Plan unless we have a real old-age insurance system, nor can I face the country.” So, on June 8, 1934, he sent Congress a message urging it to enact “social insurance … to provide security against several of the great disturbing factors in life—especially those which relate to unemployment and old age.” He added that “lessons of experience are available from states, from industries, and from many nations of the civilized world.” He set up a committee of five cabinet-level officials headed by Labor Secretary Frances Perkins to come up with a plan.

The committee soon had a large staff and an array of subcommittees. The five officials divided their job into three parts, with one big group tackling unemployment insurance, one big group working on health insurance, and a much smaller group focusing on old-age security. The unemployment team bogged down in disputes, and the health care reformers were kept from doing much by opposition from the American Medical Association, which didn’t want doctors restrained by national regulation. The old-age group, however, came together on a plan where workers and their employers would each contribute, paycheck by paycheck, to a fund that would provide the workers a pension after they retired. It was a relatively moderate, conservative answer to the radical ideas of people like Long and Townsend.

At first the proposed Social Security law was attacked by liberals as doing too little and by conservatives as approaching socialism; but opposition faded, and President Roosevelt signed the Social Security Act of 1935 on August 14 of that year. The law included unemployment insurance, aid to dependent children, and other elements, but its biggest feature was the old-age part we now think of as Social Security. Taxes for it were first collected in 1937, and for three years the trust fund was built up before the first monthly Social Security check was written in 1940, giving Ida May Fuller, a retired legal secretary in Ludlow, Vermont, $22.54.

The idea was not to provide a pension where people would always get back the amount they put in; rather it was to collect a pool of insurance money from people and return it to them if and when they needed it. Thus what you receive depends on when you stop working, and a disabled worker can start collecting early and end up getting more than that worker paid in. Originally the law required you not to work at all after 65 to get Social Security no matter how much you had paid in. This requirement was intended to remove older people from the labor pool, creating more jobs for the young. The law also excluded farm and transient workers, domestic servants, and anyone working for someone with fewer than 10 employees. Those people may have needed Social Security the most, but legislators believed the tax would be too hard to collect from them.

The system has been modified and expanded many times since its creation. In 1940 benefits were added for a survivor of a retiree who died. In 1950 cost of living raises were introduced. Disability coverage was added in 1954. Also, Medicare and Medicaid, begun in the 1960s, are both officially part of the Social Security System. In the 1970s fixes started being made to keep the system from losing money; in 1977 the tax rate was slightly increased and benefits were slightly reduced, and in 1983 the retirement age was raised (to eventually reach 67 for full benefits) while the payout for early retirees and people still working was reduced.

Because the nation is going through an enormous demographic change with aging baby boomers, none of those adjustments has made the system permanently sound. There are now more Americans over 65 than ever before to take money out of the system and not enough younger workers paying in to keep up. Social Security’s financing is in need of repair. Nonetheless, the system is hardly on the brink of collapse, as some claim.

Around 56 million Americans, a sixth of the population, received Social Security benefits in 2011. The system is paying them a total of $727 billion. After years of taking in more than it paid out and building up a surplus, the system has just begun to dip into that surplus—the “trust fund” of government bonds, now at a peak of $2.6 trillion. No one can say exactly how fast the trust fund will diminish, but the Social Security Administration and the non-partisan Congressional Budget Office (CBO) both estimate that if nothing is done it will last until around 2036. But even in that extreme case, Social Security will be able to pay out as much as it takes in. It just won’t be able to pay recipients 100 percent of what they get now; instead, they’ll get something like 76 percent.

How can the loss of money be stopped? There are four possible ways: raise the retirement age; reduce benefits or cost of living increases; raise the top income level for paying Social Security taxes; or raise the Social Security tax rate. If the tax rate were raised from its present 12.4 percent, half paid by employees and half by employers, to 14 percent, that would do it, according to the CBO. More likely is a mix of a smaller tax rise, a modest increase in the retirement age, and a rise in the cap on taxed salary.

In other words, Social Security has very real long-term funding problems, but it is not in a crisis that can’t be fixed. And as for those who say that its trust fund doesn’t really even exist because the government has spent all the money in it, in a sense that’s true—but it’s not a very meaningful sense. The trust fund’s money is all in government bonds, which pay an average of 2.76 percent. Any bond is, in effect, a loan of money to the bond’s issuer and only has value if the bond issuer can repay the loan. The bonds that compose the Social Security trust fund are backed by the full faith and credit of the U.S., and it is almost universally agreed that the U.S. government is more dependable than any other issuer of bonds—or any other investment—on Earth. So the Social Security trust fund may not be 100 percent safe, but any other conceivable investment is probably less safe. That’s one reason why attempts to “privatize” Social Security—replacing the trust fund with individuals’ investments in stocks and other securities, such as President George W. Bush proposed in 2005—haven’t gone very far. After the recent stock market crash, privatization appeals to fewer people than ever.

And here’s a glimmer of good news in that long, uncertain future: Eventually, the flood of baby boomers will end, and older people won’t so greatly outbalance younger ones as they do in this unique period of history. So even if the next generation can’t retire quite as comfortably as Americans could in the unprecedentedly prosperous years since World War II, maybe the generation after that will be more comfortable again—as long as we don’t give up on a Social Security system that has worked wonders for millions of Americans for most of a century. There’s a reason it has been “the third rail of American politics” ever since House speaker Tip O’Neill first called it that in the 1980s: Everyone worries about it, but virtually no one wants to lose it.

]]>in the Jan/Feb issue of the Post, Frederick E. Allen gives us the facts about Social Security and explores its history. That history is well-known to Post readers. In 1955, Robert M. Yoder penned this article, which features a few of the thousands of letters that the Social Security Administration received on a daily basis.

UNCLE SAM’S BIG PAY-OFF

by Robert M. Yoder
Nov. 19, 1955

One reason the Social Security Administration gets mail by the truckload is that every day finds an average of 15,891 Americans in need of Social Security cards. About 8220 need replacements for cards destroyed by accident, lost or stolen. The other 7671 are beginning their working careers.

For the great majority of those setting out to earn a living a card and a number are indispensable. Sometimes you encounter a real hardship case Like that of J. Wilbur, born all but anonymous.

J. Wilbur’s mother wrote in about him:

Dear Sirs: In regard to J. Wilbur. Seventeen years ago on January 14 I birthed a son. He was a fine boy, weighed 12 lbs. at birth. There wasn’t any account number on him anywhere and the doctor attending did not stamp any number on him. He grew up quickly.

When he was old enough he went to school as all other boys do. Learned very fast as he was a bright tot. He has been working on his father and his grandfather’s farms. Wilbur is now in the 11th grade. Mr. Jones asked Wilbur recently would he help him in his meat market on Saturdays. He also told him to write and get him a Social Security card. The boy never before having worked anywhere but on the farm we never did number him nor anyone else number him either. Will you all please number him and send him a Social Security card?

The Social Security people made haste to number poor unnumbered Wilbur, because if you don’t have a number these days you are cooked, and no two ways about it. You would also feel a little left out. For outside of the weather, taxes and the two-sex system, few things concern so many Americans as does Social Security.

Babies by the thousands are supported by Social Security benefits, and the other day a man in Massachusetts asked for a card at the age of 102. Some 69,000,000 citizens contribute every payday or when they pay their income tax, and while only 78,000,000 accounts are active, Social Security actually has a whopping total of 115,000,000.

That many interested parties are bound to have a great miscellany of problems, claims and questions. So it is not surprising that mail trucks bring 300,000 to 400,000 letters a month to national headquarters of Old Age and Survivors’ Insurance activities, in Baltimore, with thousands more arriving at the six area and 532 district offices.

Most of the letters in this Mississippi of mail are routine business correspondence. But there are anxious letters and sad ones. And it lightens and brightens the job that there are also funny letters: From the man who wanted a new card rushed “because I need it to obscure my job with.” From the man whose card “was stolen or picked” in spite of the fact that he was “in a sobber state of condition.” From the woman who thinks Social Security can be turned on like electric service. “I would like to draw Social Security for the coming five months, taking effect the 10th of December,” she wrote briskly. “Due to circumstances beyond my control, I have become pregnant.”

There is a steady stream of letters asking the big social-insurance agency to locate someone. With nice economy of words, one letter painted the picture of a man who finally broke under a great common burden. Many will know how he felt. Said the letter:

“Dear sir: I have a cousin of mine who is missing for three years. He went away to pay his income tax and never showed up any more.”

The assumption that Social Security is on familiar terms with all its millions upon millions of clients brings in letters like the one from Millie. “Please get in touch with Dan, my husband,” she wrote, “and tell him to call or write home right away, the bathroom is out of order, water is leaking under the house. I don’t have money to fix it. Thinks.”

Social Security and the Railroad Retirement Act are correlated. It may be necessary to decide which fund pays a wage earner’s survivors. So a standard question is asked: did the wage earner ever work for a railroad? To many, the question seems odd. To one widow it seemed entirely natural. “My husband never worked for a railroad, ever,” she wrote. “You must be thinking of his brother, Willie.”

Social Security knows a Willie or two, she was right about that. In Smiths alone, they’ve got some 32,000 Wills, Willies, Williams or Bills. But Social Security doesn’t know all its clients personal-like, as you might say—not as well as the widow seemed to think.

Name changing produces a lot of mail, including this little lament: “Sir: I was living here under another name on account of a woman. She said to go under that name. Which she has gone and got me into a mess of trouble under that name. So please sign my card in my right and lawful name.”

“Dear sir,” one woman wrote impatiently. “As you was asking why wasn’t my name the same on Item 1 and 3. So as you may know. People are always getting married. Arn’t they? And that is exactly what I done.”

People sure always are, and it is tough to keep up with some of them. An impulsive Texas girl asked for a new card on February second because she had just married. She wrote next to ask for the old card back “as I am no longer married.” That was on February third.

Or they don’t quite get married, and it takes several letters to find out just what the deal is. When an insured wage earner died, in the Southwest, it appeared he had a common-law wife to whom benefits should be paid. But Rosa, the lady in the case, said the relationship was purely informal and for fun. “I was just room here,” Rosa wrote, “and he was my boy friend. Because I have a husband.”

A widow’s right to receive benefits sometimes is beclouded by a previous marriage. In Lucy’s case, Social Security needed assurance that Lucy’s first marriage, to Frank, had terminated in some definite way. Lucy wrote back that it was definite enough.

“You want to find out how my marriage to Frank ended. Well, sir, I DEVOURED him. Signed with my own hand, Lucy.”

Another widow, hoping for benefits as the survivor of Husband No. 2, needed evidence that her first husband was not an impediment. She wrote her mother in Mexico. Mamma replied with spirit.

“How thoughtless are the gentlemen,” she wrote. “You first husband is now dead and it is impossible to dig him out of the cemetery. I am very sorry. If he were alive I would have found him and would have sent you his head in a box.”

What mamma had against poor Juan, or Pedro, or whatever, she didn’t say. He may have been shiftless. Some men are. As this letter makes clear:

“Dear Social Security: My husband took sick January 20 and died Feb. 27. He hasn’t earned anything since.”

Sometimes a mix-up is Social Security’s fault. The administration got one card back with the complaint “You spelt my name rong.” But a little confusion is inevitable. A Mississippian with a card in one name began using another. Asked why, he explained that his mother had just remarried, at eighty-four. Her boy, aged sixty-five, had taken the name of his new papa.

On suitable proof of death, a lump-sum payment is made to defray funeral expenses. Often something less definite than a death certificate must be accepted, since not everyone dies in bed. Social Security was satisfied in Emil’s case. For about Emil’s passing, to a watery grave, a witness wrote this:

“The last I saw of Emil he was pulling on the whistle frantically to signal the other boats with one hand and holding the wench with the other.” They assume the writer meant “wrench” or “winch,” but in any case it seemed clear that Emil was gone.

Sam’s friends didn’t see him make his exit, but they were confident Sam was a goner. Said a letter about this:

“Dear sirs: Everybody here is sure that Sam is dead. We and the police looked everywhere for him. He was very regular and we could always count on where he was if he wasn’t home. At Johnny’s Stag Bar they said they knew he’d walk in the door at 5:30 on the dot every night. But he never came that night, so I know he must be dead.”

Jimmy’s wife said there was no doubt in her mind about Jimmy either. She knew him. He was dead, all right, or he’d come home for meals.

“Gentlemen: I know what’s in your mind. You think that James walked out on me. Well, he threatened to, often enough, but he never meant it. He liked his comfort too much and he couldn’t eat restaurant cooking. If he’s still alive, it would be a big surprise to me. It just wouldn’t be like him.”

Usually the lump-sum payment, running from $90 to $255, is to a close relative. Occasionally the expenses are borne by a seeming stranger. Then Social Security looks into the circumstances. “You were hardly more than a casual acquaintance,” one man was told. “Why did you pay this man’s funeral expenses?” His answer was simple, plain and without a trace of self-glorification.

“Well, sir, I had to,” he said. “He warn’t in no shape to do it.”

What with one thing and another, Social Security people are hard to surprise. Even so, one death notice hoisted their eyebrows, for it seemed to come directly from the late lamented. It was a letter apparently asking for the lump-sum payment, and it said:

“I, Enola, died Sept. 14. Please answer and let me know. Thanks.”

That line of Thomas Gray’s about “the short and simple annals of the poor” is much admired. Any Social Security correspondence reviewer would observe, however, that the poet didn’t know many poor people. Their affairs, financial and domestic, can be complex in the extreme. The same is true of men and women in middling circumstances. One of Social Security’s widows has married nine times since they began keeping track of her. Nine husbands, all different, wouldn’t present much of a problem, but she favors two men, marrying first one and then the other. And in interludes of singleness she prefers to revert to her original married name; though it has been explained to her that she can no longer claim widow’s benefits.

The “ordinary man” frequently turns out to be an extraordinary fellow indeed, battling extraordinary problems. The proprietor of a coal yard was reproached for not keeping up on the reports an employer must make. He replied that he was having woman trouble, at age seventy-two.

“I would have complied long ago if I could,” he wrote. “I have a wife seventy years old. My business doesn’t justify me having someone just to do my writing. I can’t keep a combination housekeeper and to do my work because my wife is so jealous. No one will stay long enough to learn the work. She makes them sleep in the hall or in the room with her, when we have plenty of vacant rooms. If you have any suggestions that will help, I’ll be glad to co-operate.”

Many a big-business executive might not be able to take the troubles which snap and yap at the little businessman. Sometimes they prove to be more than the little businessman can take. Reproved for not filing returns on time, one man—the names are fictitious—replied as follows:

“Sir: I had an accountant, a Mrs. Warren, that got pregnant. Everybody was so surprised, but she and her husband seemed to know all about it. One day she was working and the next day she was in the hospital and back and forth she went.

“She had various employers, and one, a Mr. Phillips, overdrank and dropped dead. This caused Mrs. Warren to miscarry her baby, and by the time I got my books out of this six months calamity I am surprised that any of it was reported correctly.

“I paid the accountant to do the work and she was supposed to do it right as well as the accountant who took over from her. I was very careful to get a man that time as I found out you can’t do anything with a pregnant bookkeeper. However, the man I got turned out to be a preacher on the side. I finally got so discouraged I sold the damned hotel.”

There are days when you can’t lay up a dime, whole years when working gets you nothing much but exercise. The self-employed sometimes find themselves—in the expressive phrase of one Social Security claimant—”suffering from inability.” A farmer reported that he raised a lot of hogs, sold them, and sat down to figure out his income, so he would know how much Social Security tax to pay. No matter how many times he figured it, he said, he came to the same conclusion—no loss, but not a nickel’s profit for all his labors with those hogs. “Anyway,” he reported philosophically, “I enjoyed their company.”

“Please use the back door,” a Social Security field worker was directed, “as the front steps don’t exist.” That is often the case with birth certificates, and establishing correct ages may be tough. If there is a family Bible, that may help. The Bibles often contain a wealth of information, crisply reported. In one, after a whole list of children born to one union, there was this terse notation: “Maw quit Paw—June, 1923.”

To one woman it was suggested that her husband might have documents bearing on her age. She replied in wrath. “I dare you to write me about him any more. Please remember that I did not live with that sorry man and do not class myself with that trash. These people may be your class, but not mine.”

Another didn’t remember the date of her birth, but did remember the gunfire which that event occasioned. “There was doubt,” she wrote, “as to my rightful father. I can faintly remember seeing five men shot over my birth or my existence when I was around five or six years old.”

Social Security workers are an enthusiastic lot, who regard the big insurance program as the happiest thing to happen to this country in many a year. Some of them have voluntarily postponed their vacations four and five years hand-running, to keep the work rolling; some field representatives put in a fourteen-hour day straightening out the affairs of men and women in remote communities. Effort like that is bound to generate friendship. Many a business house gets a good response when offering an informative booklet. But its customers probably don’t enclose a quarter for a free booklet, and write, as one man wrote to Social Security: “please take contense and go and git you a bottle of beer.”

The friendly feeling shows up in chatty letters full of neighborhood or personal news notes. Like this:

“Dear sir: They told me you want to get rid of a typewriting machine you all have. I would be tickled to own one. I would give you good money for it. It would be real nice to write a letter and not have to use a pensil, my pensil is always broke and the butcher knife is dull because the baby digs holes in the yard with it. I got the money left from the hawg I razed last yr. I had to use part of it when our cow got the black leg. It didn’t do no good. Old Pansy dyed enyway. Yr true fren—“

“I don’t know how you figured my check,” wrote a satisfied customer, “and I don’t care. But I think it was largely owing to the good job you did. If you ever want a murder done, let me know.” Another wrote: “Never was allowed a Social Security number before. I’ll be just as tickled with it as a pig with a tail on both ends.”

On the other hand, there is no telling what simple question will provoke a storm. Applying for an account number, one man failed to supply his father’s name. Asked for it, he wrote as follows:

“Stranger: You can get my father’s name from the county court house. I positively will not give it to you. To hell with any number or anything else as far as I care. It seems to me a lot of you people want to know too dam much that is none of your business.”

There is a steady demand for advice on problems of heart and home. One sixty- four-year-old woman would in a year begin drawing widow’s benefits. But she was engaged, she explained, to a man of sixty-five. She wondered: Would she be better off, benefit-wise, as a widow or a bride?

“As a wife,” she was told, “you will have to be married three years before you can draw benefits.”

She said promptly that she would call the engagement off. “It pays to go into these things,” she said. “Three years, is it? I just don’t think it’s worth it.”

But Social Security felt duty-bound to show her the whole picture. In the unhappy event that her new husband died after hardly more than a taste of wedded bliss, she could draw benefits after one year of marriage to him. That put a different complexion on things. Three years, no. One year, yes. “In that case,” she said briskly, “I’ll just go ahead with my plans to marry and thank you very much.”

Now and then a little confusion develops over mothers’ benefits. A young widow draws benefits of this nature, but they stop if she remarries. Even so, payments to small children go on. Little Howard’s mother got a mothers’ benefit check after she had remarried. She wasn’t entitled to it, and sent it back, announcing her decision:

“I have married, but Howard is still with me,” she wrote. “I am sending the check back and keeping Howard.”

There are letters written in black despair, from those trapped in an impoverished old age. But there are others from good jaunty souls meeting old age with fine serenity. Notifying Social Security that it was time to start sending those checks, one man wrote:

“Well, the wheels has rolled around to three score and ten. I understand I shall receive a donation from our good old U.S.A. I have the enclosed number and am self-employed. I have purchased me a rod and reel and a .22 to kill frogs for bait. I have retired.”

In only twenty years, Social Security has become “a basic resource . . . for most American families,” in the phrase of Commissioner Charles I. Schottland. It is “the cornerstone of the Government’s programs,” as President Eisenhower put it, “to promote the economic security of the individual.” And an old boy in Denver figured the program could increase its usefulness by doubling as a matrimonial bureau. After a Colorado disaster, it was announced that the women widowed by the blast would receive as much as $25,000, over the years. A sharp-eyed widower at once took pen in hand.

“I am at home after 4:30 every evening,” he wrote, “and would like to meet some of those nice women.”

A further testimonial comes from an oldster who said this mighty piece of social engineering had tided him over just fine until he found something which was more fun. Returning a pension check, he wrote:

“It is with great pleasure that I inform you that I have returned from the never-never land of retirement to the land of the living, the ranks of the employed. At 70 years of age, a bachelor, with a book-keeper’s career behind me, I am starting a new career as a salesman of household products. I am going out into the wide world and meeting the fairer sex on equal terms. I find ladies in almost every kitchen who look with favor on me, who take pleasure in inspecting my wares and chatting over a cup of coffee.”

Ladies whose husbands, he added smugly, “apparently do not have the gift of conversation,” though all right at earning money, with which to buy household products.

A great many of the letter writers want a general description of the whole program. In this thirst for knowledge, this praise-worthy interest in public affairs, they may even be impatient. Like this:

“Dear sir: It seems like we just get our card game going when someone starts in on politics or something, lately its been income tax and Social Security. What conditions must excist before Social Security can be collected and how is it firgured? Please settle our argument so we can go on with our card game.”

]]>Retirement Age: 65 and Risinghttp://www.saturdayeveningpost.com/2009/03/01/in-the-magazine/trends-and-opinions/retirement-age-65-rising.html
http://www.saturdayeveningpost.com/2009/03/01/in-the-magazine/trends-and-opinions/retirement-age-65-rising.html#commentsWed, 30 Nov -0001 00:00:00 +0000http://72.3.135.59/wordpress/?p=882Retirement isn’t what it used to be, as growing numbers of retirees are returning to the work force—by choice or by necessity. Kelly White has done a lot in his 70 years, from operating a bulldozer to running his own construction company. He’s worked in military intelligence, owned an apple orchard, and invested in the […]

]]>Retirement isn’t what it used to be, as growing numbers of retirees are returning to the work force—by choice or by necessity.

Kelly White has done a lot in his 70 years, from operating a bulldozer to running his own construction company. He’s worked in military intelligence, owned an apple orchard, and invested in the stock market. By almost anyone’s standard, he’s earned the right to slow down.

But the times, they are a changin’. Like many of his peers who have hit retirement age, White is working as hard as ever, “probably harder than I did in my 30s,” he says. These days you’ll find him crunching numbers and serving customers at the HoneyBaked Ham store in Silverdale, Washington, where he and his wife, Sue, put in close to 50 hours per week —apiece.

The Whites tried retirement and didn’t take to it. “We just got bored. We also lost a fair amount of money in the stock market spiral.” So they launched a new career as owners of a popular food franchise.

Ironically, the downturn to which White referred was the dot-com collapse of 2000 and 2001. That seems like small potatoes compared to the 2008 market collapse, which has made work a virtual necessity for many people 65 and older. Other key factors—Congress’s decision to raise retirement age, the escalating cost of health care, and an aging populace—have contributed to the new economic reality: Retirement age just isn’t what it used to be.

Retirement security “is being eroded from a number of sides,” according to a joint study by the Economic Policy Institute and the Center for American Progress. “The decimation of retirement savings due to a sharp stock market decline, historically low interest rates, and in some cases, corporate fraud, has reduced household savings. In addition to these factors, retirement income security has also been undermined by rising health care costs.” The U.S. Department of Labor confirmed the trend in a recent report. “With the baby-boom generation about to start joining the ranks of those age 65 and over, the graying of the American work force is only just beginning,” it said.

Roughly 6.1 million people age 65 or older are in the work force today, compared to 3.8 million 10 years ago. No other age group has seen such huge jumps in employment in recent decades. Between 1977 and 2007, employment of workers 65 and over increased 101 percent, compared to a 59 percent increase for total employment, according to the Bureau of Labor Statistics. The number of employed men 65 and over rose 78 percent; employment of women 65 and older increased by 147 percent. Although they’re still less than 1 percent of the total labor force, the number of working folks 75 and older jumped a whopping 172 percent.

In the latest AARP survey on the subject, 70 percent of “mature workers,” those between 50 and 70, said they’ll keep working through their 60s and 70s. Sixty-four percent of those working now cited financial need as the reason. Another 11 percent mentioned financial security and the desire “to save more for retirement.” Keeping health care benefits was another commonly stated reason.

Even with Social Security and pension benefits, many older people simply haven’t saved enough to retire. And some who thought they had enough watched the worth of their 401Ks and other nest eggs plummet by 30, 40, or even 50 percent this past fall.

“A lot of the value of my assets is declining precipitously,” says Tina Beer, 67, of Sarasota, Florida, who retired at 65 after 35 years in higher education, most recently serving as dean of liberal arts at the Ringling College of Art and Design.

A year ago, Beer went back to work. This time she chose a part-time and virtually stress-free position that allows her to be outdoors much of the time, which makes it fun. As a pet sitter and dog walker for Fetch! Pet Care, she can earn from a few hundred to almost $1,000 per month. The extra income helps Beer and her 73-year-old husband afford travel, entertainment, and the extras they couldn’t otherwise enjoy. Plus the job is flexible: If she and her husband want to go sailing for a couple weeks, she just notifies her employer, and he finds someone else to take her jobs.

Although Beer could have started her own pet sitting business, she affiliated with a franchise so she wouldn’t have to worry about filling out paperwork, finding clients, collecting money, or other details of owning a business. Beer’s only concern is not to earn too much. Social Security benefits become taxable once the total of adjusted gross income, tax-exempt interest income, and one-half of Social Security benefits exceeds $25,000 for individuals or $32,000 for couples.

Unfortunately, folks wanting to retire early or work past retirement age have to keep track of such things to avoid running afoul of Social Security and pension rules that can end up costing them.

Historically, 65 has been considered normal retirement age because it’s when people can claim full Social Security benefits. In 1983, Congress voted to gradually raise the full retirement age beginning with people born in 1938 or later. For anyone born after 1959, full retirement age is 67. Congress based its decision on the improved health of older people and increases in average life expectancy.

People can still start receiving Social Security benefits at 62, but there are reasons not to. If you’re under full retirement age when you start drawing benefits, you’ll lose $1 in benefits for every $2 you earn above the annual limit. For 2009 that limit is $14,160.

If anything, the trend now is to delay claiming benefits as long as possible, which is currently age 70. People who keep working will be rewarded in the form of a delayed retirement credit: A person born in 1943 or later gets an 8 percent higher check for postponing retirement until they are 70. Also, Social Security benefits are based on your top 35 earning years, so those who work past the normal retirement age and continue to make good money can ensure a bigger monthly check.

There are some obstacles, however, for those who want to stay in their current jobs, especially if their employers are among the minority still offering defined benefit pension plans. Under the terms of many of these plans, companies cannot make both salary and pension payments to the same worker at the same time. In addition, some pension plans base their payouts on an employee’s salary during the last year of full-time employment. A worker who stays with his current employer but downsizes his job and accepts reduced salary could actually lose money if the distribution is based on the lower salary amount.

Fortune 500 companies such as Boeing, Eli Lilly, and P&G have found ways around such predicaments. They still use senior, retired workers, but they find and retain them in nontraditional ways, explains Linda Muskin of Clarus Communications. For example, some firms contract with YourEncore (yourencore.com), which has a database of more than 4,000 retired engineers and scientists interested in working on projects in which they can make a meaningful contribution, have a flexible schedule, and get paid for their expertise.

Companies and retirees are less likely to butt heads with Employee Retirement Income Security Act (ERISA) laws governing postretirement compensation when they work through a third party, Muskin said. The Employee Retirement Income Security Act of 1974 is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry. Although the purpose of the law is to provide protection for individuals in these plans, some of its rules actually discourage postretirement employment.

Sen. Herb Kohl, (D-Wis.), who chairs the Senate Special Committee on Aging, has introduced legislation to eliminate these kinds of barriers for older Americans who want to stay in the work force longer and to encourage employers to recruit and retain older workers. The Incentives for Older Workers Act (S. 2933) addresses both the pension and Social Security dilemmas. It would prohibit pension plans from penalizing individuals for continuing to work on a reduced schedule, and it would revise the Social Security benefit reduction to $1 for every $3 earned before full retirement age. The bill also would allow individuals to earn delayed retirement credits for Social Security purposes for an additional two years until age 72, instead of the current limit of 70.

Bottom line: Retiring at 65 is no longer a realistic American dream for workers or corporate America. Public policy needs to change to reflect that fact.

If you’re 65 and fairly healthy, chances are good you’ll live another 20 to 25 years. To retire at the level recommended by financial planners, you’d need about 75 percent of what you were earning when fully employed, multiplied by the number of years you’re expected to live. As an example, someone making $100,000 would want to have at least $1.5 million in the bank. Such savers are the exception, not the rule.

Fortunately for seniors, the need to work longer coincides with a looming labor shortage forecast for many sectors of the economy as baby boomers age out of the work force. Economists say the spike in unemployment that occurred in 2008 is temporary. According to the Special Committee on Aging, the U.S. labor pool will face a shortage of up to 35 million workers by 2030. Fields already reporting shortages include health care, technology, social services, education, public utilities, and engineering.

A multitude of nonprofit and commercial ventures have sprung up to connect seniors with employment and service opportunities. SeniorJobBank (seniorjobbank.org ) is an online service aimed at the over-50 community where job seekers can search job listings and employers can post openings. The AARP Foundation offers two programs to help qualifying seniors find meaningful, well-paying jobs. The Senior Community Service Employment Program targets those 55 and older who are unemployed and need to work to survive. Seniors are placed at “host agencies” such as food banks and hospitals, where they work 20 hours a week and receive at least minimum wage. The jobs are considered temporary while the seniors hone their skills and the program helps locate permanent part-time or full-time work. Another AARP program, WorkSearch, provides career placement advice and the training seniors need to remain in or re-enter the work force.

For those who want to continue to feel useful but don’t necessarily need the money, a campaign called The Experience Wave (experiencewave.org ) is working to change federal tax law to permit older people to treat the time they spend volunteering for nonprofit groups as tax deductible. There’s an irony, of course, to this latest trend of seniors working past 65. One of the great achievements of the 20th century was making retirement a viable option for so many. The allure of travel, spending time with grandchildren, and enjoying a well-deserved rest had become the Holy Grail of the aging process. Here we are now, just a few years into the 21st century, and the goal is to make it easier for seniors to remain or return to work.

The best of both worlds, of course, would be one in which the laws were flexible enough that seniors could jump in and out of the labor force as it suits their needs, and employers could recruit older workers without anyone assuming additional financial risk.

Henry Ford once said, “Nobody can think straight who does not work. Idleness warps the mind.” It’s a sentiment with which Tina Beer and Kelly White and many of their peers fully agree. Over one-third of White’s fellow HoneyBaked Ham franchisees are “retired” workers.

“What I like about my job,” Beer says, “is it’s outdoors most of the time and, to me, that’s play. I get to play with adorable dogs and cats and supplement my income.”

“Unless you’re really active, you do begin a process of mental deterioration as you age,” White says. “Working keeps us young.” And that’s the silver lining to the new economic reality.